Best Balance Transfer Credit Card
The balance transfer credit card is best tool in the time of financial problems. If you have shortage of payment of bill, you can use balance transfer facility to save your credit history. Before choosing a best balance transfer credit card, you have to consider the important factors such as balance transfer fee, amount of debt and months you needed to pay off the bills.
Methodology:
Choosing a best balance transfer credit card is not an easy task. Market has multiple offerings. Our team have researched hundreds of balance transfer credit cards and selected only a few for your easy decision. We have considered the important factors such as number of months for balance transfer, welcome bonus, annual fee, balance transfer fee, rewards and APR.
What is meant by Balance Transfer Credit Cards?
A balance transfer credit card allows you to save penalty of late payment and high in interest rate by transferring your debt to another card. Normally balance transfer fee is charged that is 3% to 5% of amount. This fee is low as compared to pay high rate of interest.
What is meant by 0% Balance Transfer Credit Cards?
0% balance transfer credit card is a promotional offer by the credit card companies. It’s mean that you will charge 0% for balance transfer from one card to another for a specific time. So it is a great offer especially during financial crises. You have to pay nothing in term of interest for a specific period of time.
What about balance transfer credit card fee?
When you transfer amount from one card to another, usually balance transfer is charged that may be from 3% to 5% of amount. During promotional offer, this facility can be at 0%. Before taking the decision of balance transfer credit cards, it is recommended that consider the balance transfer fee amount at your existing outstanding debt. Compare this fee with APR than do cost benefit analysis. Now you can easily decide that which situation have benefit for you.
How many days are requiring completing the procedure of balance transfer credit cards?
Process of balance transfer credit cards may take 2-7 days depends upon the company you applied. Every bank requires different number of days to complete the procedure. For example American Express takes 5-7 days while Citibank takes 2-21 days & Chase may take 1-2weeks to complete the process. Number of days depends upon two factors. First factor is that from which bank you are transferring amount and second factor is that where you are transferring amount.
How much amount can be transferred by balance transfer credit cards?
Different banks have different offer of balance transfer credit cards. Limit of card depends upon the issuing bank and your credit score. Chase bank usually offers up to $15,000, while it charge 5% as a balance transfer fee that will be $750. Compare $750 with APR of previous card, than decide which situation is best for you.
How balance transfer credit card works?
Balance transfer is facility to shift your debt from one card to another at very low rate. This facility will save money from paying high rate of interest. After the transfer of your debt, you can adjust loan at easy installments without paying any extra penny. However some cards will restrict you from new shopping and will allow you only adjustment of your debt.
How to perform balance transfer?
Normally procedure of balance transfer is very simple. We have shortlisted a few points to consider before taking the decision.
1. First of all, choose the cad where you transfer your debt balance. If you are doing your process online than choose balance transfer option or call the agent of bank for smooth process.
2. Read all the term & conditions carefully and check that;
· How much is balance transfer fee?
· How much term is being offered?
· How much is APR rate after the expiry of term?
3. Transfer only needed balance. It is possible that your card limit of new card is more than your debt. It is recommended that only transfer amount that you needed. It will lower your cost of transfer and will be feasible to manage different card.
Why can’t I transfer balance?
Some credit cards does not offer balance transfer facility and some cards charged high fee as 5%. If your card does not have feature of balance transfer, it will not be possible to transfer your balance from one card to another. Before applying card, please ensure that you card have facility of balance transfer credit card.
How I can lower my interest rate by using a balance transfer credit card?
If we talk about different available loans, than the most expensive loan is credit card. A very high rate of APR is charged when you are unable to pay full bill at due dates. Interest charges start accumulating from the very first day of transaction. In this situation, it become challenging to pay debt will hurt your credit score. A bad credit history means no more facility of any other loan.
A balance transfer credit card will zero or low transfer fee will save money in this situation. Your gain can be significant with taking timely and wise decision.
Balance transfer credit cards APRs:
Saving from balance transfer credit cards depends upon two factors. One factor is APR rate that you are paying at existing debt while second factor is balance transfer fee. We always recommend that compare both rates with term of balance transfer facility. Introductory APR should be zero or low.
Average APR charged by credit card companies is approximately 28%. However APRs of some cards are as follows;
· Average Rate 28%
· Airline Credit Cards 29%
· Hotel Credit Cards 29% student credit cards 27%
· Flexible rewards credit cards 24%
· Cash back credit cards 27%
· 0% APR credit cards 28%
· Business credit cards 29%
How much money can be saving by using balance transfer credit card?
Money saved by balance transfer credit cards will depends upon following factors;
· Markup rate
· Balance transfer fee
· Available balance
· Amount of transfer
· APR rate
Example: For example, you have credit card of worth $2,000 that have APR rate of 28% and your minimum payment of card is $100 per month. When you will transfer entire amount of $2,000 to some other credit card that have 0% APR. In this case you can save significant amount of interest.
How to choose best balance transfer credit card?
Choosing a best balance transfer credit is not so simple. First thing that you consider is zero or low balance transfer fee. Always choose a different bank to transfer your debt because same bank will usually not allow you to transfer the debt. However it can be happened at the time of promotional offer.
You have to consider the term of balance transfer facility with 0 or low APR. Longer time means low cost and more money saving. However you have to consider the following factors;
1. Credit Score: always check your credit score because each issuer has different criteria and requirement of credit score. This is a factor that makes you eligible for the balance transfer facility.
2. Zero APR or low APR: It is most important factor to consider. Always try to go with zero interest cards that have longer term, so that you could pay your debt in easy monthly installments without paying any extra penny.
3. Longest Introductory offer: in the case of balance transfer credit card always long term strategy wins and you gain a lot in term of money. If your plan is for short period, than reconsider your decision or search some other card.
Pros & Cons of Balance Transfer Credit Card:
Balance transfer is a facility to pay your debt with relax and comfortable term. Despite of handsome saving, Balance transfer credit card have following Pros & Cons;
Pros of Balance Transfer Credit Cards:
Following are some pros of balance transfer credit card;
Interest Saving
When you transfer your debt from one card to another, you normally enjoy 0% APR for the introductory period of time. This 0% APR is a great opportunity to save a reasonable amount in the shape on interest charges.
Combine Credit Cards
it is possibility that you are maintaining multiple credit cards with different amount of debt. By balance credit card, you can combine different credits to one credit card of your choice. One credit card is easy to manage.
Switch to Best Credit Card
Different credit cards have different perks and benefits. By balance transfer credit card, you can easily switch to best credit card. You can choose credit card of your choice and comfort.
Cons of Balance Transfer Credit Card
Balance transfer credit card is not free from Cons, it have some disadvantages that are as follows;
Balance Transfer Fee
First and most expensive disadvantage of balance transfer credit card if balance transfer fee. Normally balance transfer fee of credit cards is 3% to 5% of amount transferred. It is huge amount.
For example, if you are transferring $10,000, than with 3% balance transfer fee, you have to pay $300. Similarly if balance transfer fee is 5%, you have to pay $500.
Full Amount Transfer
Sometimes you have debt of $10,000, while new card approved limit is just $5,000, in this situation you have problem of conflict.
High Credit Score
Best credit cards with best perks are offered to those who have good or excellent credit score. Building a good score is time taking process. So you can get disapproval of your desired credit card, if your score is not up to mark.
How to decide a balance transfer credit card:
Choosing a balance transfer credit card from hundreds of available cards is tough decision. This decision will impact at your financial position. Hundreds of dollars are involved in this decision. As it have long term impact, so it is recommended that consider below mention questions before talking decision.
· How much time you needed to pay off debt?
· How much amount you want transfer?
· What is balance transfer fee?
· How much is 0% introductory APR?
· What rewards and perks are being offered by a new credit card?
Problems in Balance Transfer:
Balance transfer facility depends upon your credit score and your financial position. Before apply of a new credit card, it is recommended that improve your credit score and your account statements to avoid any sort of rejection.